Acquisitions fuel Midwich profits

The acquisition strategy is paying off at audio visual distribution player Midwich, with the firm posting a 48% climb in first half profits.

The firm delivered pre-tax profits for the first half of £11.8m with revenues increasing by 25% to £264.1m.

In the UK & Ireland revenues increased by 10% year-on-year, with the acquisition of Sound Technology, struck last November, making its contribution.

A lot of the acquisition activity has been on the continent and turnover in that region climbed by 62.5%. The firm has picked up Earpro in Iberia, Gebroeders van Domburg in Benelux last March and September respectively and both have added to the growth.

The firm has not stopped there and in recent weeks, outside of the reporting period for these latest results, the distributor acquired Bauer & Trummer, which sells AV across Germany, Austria and Switzerland. That was followed last week by Sound Directions France SAS, trading as Perfect Sound, covering the French market.

"The Group's strong balance sheet means it is well placed to continue its buy and build strategy both in new and existing territories," stated Midwich managing director Stephen Fenby.

"Underpinning the Group's growth strategy is its success in sourcing, executing and integrating acquisitions. The Group takes a disciplined approach to acquisitions, seeking to add capital value without an adverse impact on the existing business. Acquisitions remain a fundamental aspect of the Group's strategy and it continues to pursue a strong pipeline of opportunities across a number of regions," he added.

In terms of the technology Fenby stated that it was experiencing strong demand in large format and interactive displays, broadcast, audio and technical video categories.

The conditions that led to the strong performance in the first half are likely to continue over the rest of the year, according to Fenby.

"The performance reported in the first half year coupled with indications of positive sales momentum and strong contributions from recent acquisitions gives the Board confidence that the Group will report full year results in line with its revised expectations, which were upgraded at the time of the Group's trading statement on 20 July 2018," he said.